10-Q 1 ip310qjan02.txt QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended January 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________. Commission File Number 0-18146 DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. ----------------------------------------------- (Exact name of registrant as specified in governing instrument) Delaware 13-3293754 ------------------- ---------------------- (State of (IRS Employer organization) Identification No.) 1221 Avenue of the Americas, New York, NY 10020 ------------------------------------------ ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (800) 829-8585 -------------- Former name, former address and former fiscal year, if changed since last report: not applicable. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- PART I - FINANCIAL INFORMATION ------------------------------ Item I. Financial Statements DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. BALANCE SHEETS

See accompanying notes to financial statements DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. STATEMENTS OF OPERATIONS THREE MONTHS ENDED JANUARY 31, 2002 AND 2001 2002 2001 ---- ---- Revenues: Equity in earnings of joint venture $ -- $ 243 Interest and other 1,637 24,168 -------- -------- 1,637 24,411 -------- -------- Expenses: Property operating -- (28,346) General and administrative 21,259 68,105 -------- -------- 21,259 39,759 -------- -------- Net loss $(19,622) $(15,348) ======== ======== Net loss allocated to: Limited Partners $(17,660) $(13,813) General Partners (1,962) (1,535) -------- -------- $(19,622) $(15,348) ======== ======== Net loss per Unit of limited partnership interest $ (0.03) $ (0.03) ======== ======== See accompanying notes to financial statements DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. STATEMENT OF PARTNERS' CAPITAL THREE MONTHS ENDED JANUARY 31, 2002 LIMITED GENERAL PARTNERS PARTNERS TOTAL -------- -------- ----- Partners' capital (deficiency) at November 1, 2001 $ 9,004,147 $(8,661,273) $ 342,874 Net loss (17,660) (1,962) (19,622) ----------- ----------- ----------- Partners' capital (deficiency) at January 31, 2002 $ 8,986,487 $(8,663,235) $ 323,252 =========== =========== =========== See accompanying notes to financial statements DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. STATEMENTS OF CASH FLOWS THREE MONTHS ENDED JANUARY 31, 2002 AND 2001

See accompanying notes to financial statements DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. NOTES TO FINANCIAL STATEMENTS 1. THE PARTNERSHIP --------------- Dean Witter Realty Income Partnership III, L.P. (the "Partnership") is a limited partnership organized under the laws of the State of Delaware in 1985. The Partnership's fiscal year ends on October 31. The Partnership's last remaining property investment was its 44.6% interest in the partnership ("TPA") which owned Taxter Corporate Park. TPA sold the Taxter property on May 23, 2000, and this sale has effectuated the dissolution of the Partnership. However, the Partnership cannot wind up its affairs and distribute the balance of the Partnership's cash reserves until TPA terminates its operations (see Note 2). The Managing General Partner plans to terminate the Partnership as soon as possible in 2002. The Partnership's interest in TPA was accounted for using the equity method. The Partnership's records are maintained on the accrual basis of accounting for financial reporting and tax reporting purposes. Net loss per Unit of limited partnership interest amounts are calculated by dividing net loss allocated to Limited Partners by the weighted average number of Units outstanding. In the opinion of management, the accompanying financial statements, which have not been audited, include all adjustments, consisting only of normal recurring accruals, necessary to present fairly the results for the interim period. These financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Partnership's annual report on Form 10-K filed with the Securities and Exchange Commission for the year ended October 31, 2001. Operating results of interim periods may not be indicative of the operating results for the entire year. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. NOTES TO FINANCIAL STATEMENTS 2. INVESTMENT IN JOINT VENTURE --------------------------- TPA is currently appealing the amount of real estate taxes it was charged by the local taxing authorities during the 1997 to 2000 tax years. The Partnership understands that TPA must resolve this appeal and other matters, outstanding with the buyer of the Taxter property, before TPA can terminate its operations. Resolution of these matters is not anticipated to require any significant funding from the Partnership. The Partnership's equity in earnings of joint ventures in 2001 consisted of the Partnership's share of miscellaneous revenues earned by TPA during the first quarter of fiscal 2001. 3. RELATED PARTY TRANSACTIONS -------------------------- An affiliate of the Managing General Partner performs administrative functions, processes investor transactions and prepares tax information for the Partnership. For the three months ended January 31, 2002 and 2001, the Partnership incurred approximately $13,500 and $21,000, respectively, for these services. These amount are included in general and administrative expenses. At January 31, 2002, accounts payable and other liabilities included $13,500 due to the affiliate for the 2002 services it performed for the Partnership. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ----------------------------------------------------------------------- LIQUIDITY AND CAPITAL RESOURCES ------------------------------- As discussed in Note 1 to the Financial Statements, the partnership ("TPA") which owned the Taxter office property sold the property on May 23, 2000. The Partnership's interest in TPA was the Partnership's only remaining property interest. The Partnership dissolved pursuant to the terms of its Partnership Agreement, effective May 23, 2000, the date on which the Taxter property was sold. The Partnership owned its 44.6% interest in the Taxter property through a joint venture, and the Partnership will not be able to wind up its affairs and distribute the balance of the Partnership's cash reserves until the joint venture terminates its operations (see Note 2 to the Financial Statements). The Partnership plans to wind up its affairs, distribute its remaining cash reserves and terminate its existence by filing a certificate of cancellation in the office of the Delaware Secretary of State as soon as possible in 2002. The Partnership believes that its cash reserves are adequate for its needs until it is terminated. Except as described above and in the financial statements, the Managing General Partner is not aware of any trends or events, commitments or uncertainties that may impact liquidity in a material way. OPERATIONS ---------- Fluctuations in the Partnership's operating results for the three months ended January 31, 2002 compared to 2001 were primarily attributable to the following: Interest and other income decreased in 2002 compared to 2001 primarily due to a decrease in interest rates and a decline in average cash held by the Partnership (in February 2001, the Partnership distributed over $880,000 of its cash on hand to the Limited Partners). The negative property operating expenses in 2001 were caused by the collection of tenant receivables which were previously written off by the Partnership. General and administrative expenses decreased in 2002 compared to 2001 primarily due to expense reductions and the decreased level of Partnership activities while the Partnership winds up its affairs. There were no other individually significant factors which caused changes in revenues and expenses. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. INFLATION --------- Inflation has been consistently low during the periods presented in the financial statements and, as a result, has not had a significant effect on the operations of the Partnership. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. PART II - OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K a) Exhibits None b) Reports on Form 8-K None DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DEAN WITTER REALTY INCOME PARTNERSHIP III, L.P. By: Dean Witter Realty Income Properties III, Inc. Managing General Partner Date: March 15, 2002 By: /s/E. Davisson Hardman, Jr. --------------------------- E. Davisson Hardman, Jr. President Date: March 15, 2002 By: /s/Jeffrey D. Hahn ---------------------------- Jeffrey D. Hahn Vice President Principal Financial and Accounting Officer

DEAN WITTER REALTY INCOME PARTNERSHIP III LP 10-Q